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About Reesa Fischer

Reesa is SVP for NAIOP Massachusetts, where she is focused on maximizing value for members through exceptional programming, education, networking, and special events. NAIOP is the leading voice for commercial real estate in Massachusetts, representing developers, owners, managers, and investors, as well as those who provide services to the industry.

It’s only been about 50 days since the United States Olympic Committee officially named Boston as America’s bid city for the 2024 Summer Olympics. Yet it was quite apparent at Tuesday morning’s NAIOP Massachusetts’ Breakfast Panel that Boston 2024 has settled on its pitch to the public: The quest to host the Games is all about “the future of Boston”. The phrase repeated over and over at the event (entitled 2024 Olympics: Vision, Opportunity and a Catalyst for Change) was “2030 and beyond.” As in, “This isn’t about those 30 days in the summer of 2024, it’s about what we want our city to look like in 2030 and beyond.”

Moderator Tom Alperin, President of National Development, remarked, “We can win by losing,” meaning that Boston will benefit from a fierce debate over infrastructure and sustainably whether we’re awarded the games or not. That sentiment was echoed by panelists Rich Davey, CEO of Boston 2024 and former Mass. Secretary of Transportation; David Manfredi of Elkus-Manfredi Architects; David Nagahiro of CBT Architects and Stephen Thomas of VHB. However, winning, as Manfredi noted, is the name of the game.

This was a coming out party of sorts for Davey, who was only recently named CEO of the effort to submit Boston’s bid to the International Olympic Committee. He’s pledging that ours would be a new type of Olympics: Sustainable, largely privately-financed with no cost overruns, and that leaves a positive legacy. He cited a quarter of a billion dollars in foundation grants that have been handed out by Los Angeles over the past 31 years, financed by their hosting the 1984 games. That’s the type of legacy the Boston Games would leave, Davey insists, not the fraud, waste and abuse the anti-Olympics crowd argues would cripple the region.

It was Manfredi’s presentation that focused on real estate: in this case, potential Olympic venues. One of the reasons Boston was chosen to represent America (over New York, Washington, D.C. and San Francisco) was the viability of hosting the most “walkable” Olympic Games in history, with 28 of the 33 proposed venues within a 10 kilometer radius and an average of 5.3 kilometers between each venue. The Olympic Village, which must house 16,000 individuals, would be built on Columbia Point, which is currently home to UMass Boston. About 5,000-6,000 of those beds would later become UMass student dorms, helping to satisfy the school’s goal of adding student residences. The remainder would be transformed into affordable and workforce housing, helping Mayor Walsh achieve his goal of 53,000 units of new housing by 2030.

David Nagahiro, whose firm CBT is focused on the village, underscored the concept of a sustainable games when he noted that, “UMass students are interchangeable with Olympic athletes” in benefitting from modern dorms and amenities overlooking Boston Harbor and the Harbor Islands. It’s this type of development that would help transform the University, typically thought of as a commuter school, into a more residential campus. Nagahiro, who recently visited London and Barcelona to speak with former Olympic officials there, gushed about long-term benefits enjoyed by the former Olympic hosts. Back in Boston, infrastructure improvements would also mean UMass students would enjoy a new transportation “Superhub” at the JFK-UMass Stop along the MBTA’s Red Line.

Moving 635,000 athletes, media, staff, volunteers and spectators between the city’s two Olympic “Clusters” (A Waterfront Cluster downtown and a University Cluster encompassing M.I.T., Harvard and B.U.) is Thomas’ and VHB’s domain. He insisted that Boston proves its ability to host multiple, massive events annually with the Boston Marathon and a morning Red Sox game every Patriots Day. While the MBTA is currently is crisis mode, everyone on the panel agreed that the T must be a catalyst for moving this bid forward and that public transportation is the key to economic opportunity and growth. While not as “sexy” as new train cars, Davey pointed out that signal and power systems, along with capacity improvements, would benefit Greater Boston long after the games are gone. The numbers being cited by Boston 2024 are $5 billion in transportation investment already underway and an additional $5 billion planned. However, some of those numbers were called into question in a Boston Globe article that came out the same morning as the panel.

In 2017, Boston will find out if its quest to host the games was successful. If it is, it could mean beach volleyball on the Boston Common and Olympic baseball at Fenway Park, not to mention more than 600,000 visitors to our city over a 30 day stretch. But for those looking to make the games a reality, clearly 2024 would be just the beginning.

When the exodus to the suburbs got underway more than a half-century ago, employers followed, and the office park was born. But today, as younger workers return to the city, and employers again follow the labor, these isolated campuses of low-slung buildings, parking lots, and company cafeterias face challenges, from new competitors to aging facilities to high vacancy rates.

As a result, owners and developers across Eastern Massachusetts are seeking to reinvent the suburban office park, taking a page from urban revitalization that transformed old mill and factory buildings into mixed-use developments of housing, retail, and office spaces. In communities such as Burlington and Marlborough, developers are adding restaurants, hotels, and other amenities, as well as housing, to compete with the “live, work, play” attraction of the city.

In Marlborough, for example, Atlantic Management Inc. of Framingham purchased the former Hewlett-Packard campus three years ago to launch a more than $200 million rehab of the 110-acre site, which dates back to the 1960s. The project is well underway, with Atlantic refurbishing the two office buildings, while AvalonBay Communities of Virginia, which purchased 26 acres at the site, builds 350 luxury apartments.

Atlantic Management also plans to develop a 153-room hotel and 50,000 square feet of retail and restaurant space that may one day include a farmers market. Already, this redevelopment of the Marlborough Hills office park has attracted a major corporate tenant, Quest Diagnostics of New Jersey, which plans to locate more than 1,000 lab workers there later this year.w

“The number-one challenge for many companies is how to attract talent,” said Joseph Zink, chief executive of Atlantic Management.“Companies need to attract talent and this is one way to do it. I think we’re going to see more of this in Massachusetts.”

Suburban office parks across the nation are trying to respond to tenants insisting on more amenities, said David Begelfer, chief executive of NAIOP Massachusetts, a real estate trade group. In Massachusetts, there’s no precise figure on how many office parks are undertaking renovations large and small, Begelfer said, but “it’s dozens of them and they’re easily spending billions of dollars.”

“The market is demanding it,” he said.

Commercial real estate specialists say the trend in office park redevelopment is driven by two forces. First, property owners need to renovate aging, outdated buildings, some of which are a half-century old. Second, they must meet increasing competition from Boston, Cambridge, and other nearby urban communities.

Along Interstate 495, the vacancy rate for Class A offices is hovering at nearly 18 percent, compared with 11.5 percent in Boston and less than 6 percent in Cambridge. Commercial rents are depressed. Offices lease for only $20 per square foot in the region, less than half of what similar space fetches in Boston and Cambridge, according to Jones Lang LaSalle, a commercial real estate firm.

The site of the former headquarters of data storage giant EMC Corp. in Hopkinton is an extreme case of a struggling suburban property. The 160,000-square-foot building, just off I-495, has sat empty for 13 years, ever since EMC moved to newer offices elsewhere in town, said Steven Zieff, a partner with Hopkinton’s Crossroads Redevelopment LLC.

Crossroads has an option to buy the 38-acre property, which also includes four one-story buildings, and hopes to redevelop the site into a mixed-use complex of housing, retail stores, restaurants, and office space.

“People are looking for something different,” said Zieff. “It’s the entire ‘live, work, play’ environment that people want. They don’t want to go to just an office park with a cafeteria and parking lots.”

Along Route 128, the situation is not nearly as dire, with the office vacancy rate between Woburn and Needham running at 6.4 percent, below Boston’s. Rents near that stretch of the highway are rising as the economy continues to improve, averaging about $34 per square foot, about $20 less than office space in Boston and Cambridge.

But office park owners still feel pressure from intensifying competition with cities. In recent years, a number of suburban companies have moved to Boston or Cambridge, including ad firm Allen & Gerritsen, which moved to the Seaport District from Watertown. Biogen Idec soon will move from a Weston office campus to a new headquarters under construction in Kendall Square.

At the 13-building New England Executive Park in Burlington, the vacancy rate is 10 percent, with tenants that include tech firms BAE Systems, Charles River Systems, and Black Duck Software. Still, National Development, the park’s owner, is convinced it needs improvements to stay competitive.

Later this year the firm plans to start a major overhaul that includes demolishing an office building — all 13 buildings were built between 1969 and 1986 — and constructing 300,000 square feet of new development. The new additions will include a 170-room hotel, three full-service restaurants, and new retail and office space.

“We’re seeing this great rush to the city [by tenants],” said Ted Tye, managing partner at the Newton-based National Development. “What that’s doing is forcing suburban properties to stay on their toes. And we’re responding to that.”

National Development, however, won’t add housing to its New England Executive Park mix. Tye said he’s not convinced that housing within office parks is a smart idea. Some towns might end up getting financially hurt because commercial and industrial properties are usually taxed at higher levels than residential properties, he said.

He added that it’s also hard to duplicate urban settings within suburban parks if they’re not near public transit and don’t have easy pedestrian access to offices. “This is a source of some disagreement within the industry,” he said of housing’s role in office park redevelopment.

In contrast, Nordblom Co., owner of Northwest Park in Burlington, is a firm believer in “live, work, play.” Three years ago, it launched a massive $500 million project to redevelop about half the 285-acre office park to include 600,000 square feet of retail space, 300 new apartments, a 225-room hotel, and 3.5 million square feet of new or refurbished offices.

Todd Fremont-Smith, senior vice president of Nordblom, said the redevelopment, which could take another 10 years to complete, has already attracted new office tenants, a steakhouse restaurant called The Bancroft, and a new Wegman’s supermarket, which opens in October.

“By mixing the uses, you have a more dynamic environment — and it’s more rentable,” Fremont-Smith said. “People are seeking urban-like amenities where they work. I think we’re going to see more of this at both office and industrial parks. People want it.”

The following blog post was submitted by David Fleming, Principal at PACE Communications Group, a marketing firm that works with CRE companies to promote properties and help lease space.

The 2014 NAIOP Massachusetts Bus Tour,“Changing the Game in Boston Real Estate” lived up to its name as attendees got an up close look at game-changing development projects across the city. The tour covered dozens of new and redevelopment projects in Allston, Brighton, the Fenway, Back Bay, the South End, and the Seaport/Innovation District.

At the Boston Innovation/Seaport District, attendees visited another game-changer, Seaport Square. Here, Skanska USA is building three projects totaling close to 1.2 million square feet. Project partner WS Development is responsible for bringing the ground level retail to each building.

Brian Sciera of WS Development explained the company’s mission at Seaport Square is to create energy and excitement where buildings meet the street. To WS Development, energy means retail. And, fashion retail, in particular.

“The backbone of any good retail district is its fashion component,” said Sciera. “Fashion brings that energy to the street by driving interaction between people and buildings.”

Sciera said WS Development is in discussion with several well-known retailers, but was not at liberty to disclose names.

The Skanska USA buildings at Seaport Square are:

101 Seaport: located on Parcel L1 across from the Boston Innovation Center, the office tower will be the new Boston headquarters for PwC

Watermark Seaport: located on Parcel K, the project will consist of a six-story building and 17-story residential tower, including 346 luxury rental units and 25,000 square feet of retail (Watermark Seaport is a JV with Twining Properties)

Fenway’s Other Big Papi: Samuels & Associates

When you’re talking about development in the Fenway Triangle, you’re talking Samuels & Associates. With more than $1 billion invested in the neighborhood, Samuels is Fenway’s other Big Papi.

Just down Boylston Street from The Trilogy and 1330 Boylston, the NAIOP tour buses rolled by Samuels’ latest two projects: The Van Ness and The Verb. The Van Ness is a 22-story, 320-unit apartment building that’s under construction and will be home to downtown Boston’s first Target. And, recently underway, The Verb is a 43,000-square-foot boutique hotel project at the site of the former Howard Johnson’s.

At the Landmark Center, bus tour attendees were treated to lunch by area favorite Tasty Burger. Samuels’ Joel Sklar and Peter Sougarides were onhand to discuss the company’s Landmark Center expansion project, which they described as a complete “rethinking of the former Sears building.” In addition to renovating the interior, updating infrastructure, and removing the above ground parking garage, Samuels plans to create a “world class food market” anchored by Wegman’s.

By adding the Landmark Center expansion to development projects The Van Ness and The Verb, Fenway’s other Big Papi has struck again.

A Game-Changing Tour

Highlighted by Boston Landing, Seaport Square, and the new Fenway Triangle projects, NAIOP Massachusetts’ “Changing the Game in Boston Real Estate” bus tour lived up to its name—and then some.

Throughout the event, panelists including Charles River Realty Investors President Brian Kavoogian, Cushman & Wakefield New England Area President Rob Griffin, AEW Managing Director Bob Plumb, DivcoWest CEO Stuart Shiff, and Blackstone Principal Jacob Werner touted Boston’s young and vibrant workforce along with its high level of innovation, top-notch schools and universities, and impressive CRE market. “[Here in Boston] it’s a very well educated labor force that draws from traditional financial services, technology and a growing biotech business,” said Werner.

The city is the 5th largest office market in the U.S. and is currently second only to San Francisco in terms of CRE vacancies. While panelists made several favorable comparisons between Boston and the “City by the Bay”, San Francisco is, unquestionably, the leader in development. It has a total of 3.5 million square-feet under construction at the moment, compared with Boston’s 2 million square-feet. San Francisco’s overall rental rates are overall back at 2007 levels while Boston remains approximately 20 percent below 2007 rates; in fact, Boston’s rental rates are still considered “cheap.” However, based on the city’s similarities (coastal, hubs of innovation) and with the belief that San Francisco is a bellwether, Boston’s CRE outlook remains bullish. “There’s real scarcity in [Boston] and scarcity is how you ultimately create value,” noted Kavoogian.

Another area of comparison: Massachusetts trails only California when it comes to NIH Funding. According to Cushman’s Griffin, Massachusetts General Hospital alone receives more NIH dollars than 90% of states. He also noted how the biotech and biopharmaceutical sectors continue to add more and more jobs and create new drugs. “If you’re a global investor and you look at Boston,” said Plumb, “you’ve got all the ingredients for job growth.” And the Boston area’s hottest markets for start-ups (Boston, Cambridge, and Waltham) have experienced an impressive 318 new deals as the market has bounced back. “Focusing on those markets that are both gateway and technology-related markets has been appealing to us,” said Shiff.

In addition to those three markets, there is also hope for Boston’s Central Business District (CBD) despite all the Seaport District’s development. The CBD is currently experiencing 15 percent in rent growth. The panel felt that once the CBD integrates more residential and retail projects into its urban dynamic, it will become “gold”.

Although the panel’s take was overwhelming positive, they did caution listeners to keep a couple of things in mind: Boston has 25,000 new apartments (many which are luxury) inside Route 128 currently under construction. It’s crucial the region creates jobs that meet those rents and attracts a suitable workforce. Also, in terms of capital markets, the industry needs to start thinking about rising interest rates–which are likely to increase as the economy continues to slowly improve.

Real estate professionals gathered at NAIOP’s “You Can’t Get There from Here” event to discuss one of the top priorities in Boston right now: improving transportation. It was exciting to hear about all the projects that are in the works, upgrades to the system already underway, and new technology that will allow commuters to get from point A to point B more efficiently.

Secretary Davey explained how MassDOT will make numerous improvements to the city’s existing infrastructure with a $12.4 billion Capital Investment Plan that aims to make the lives of commuters easier and spur economic development. The much-needed green line extension to Somerville and Medford as well as the South Coast Rail extension to Fall River and New Bedford will make a huge difference for those who live outside Boston. These new public transit lines will deliver an option that’s much less expensive than driving, which means fewer cars on the road and a significant reduction in traffic congestion and of greenhouse gases (something the Secretary said was a major initiative for MassDOT).

Additionally, a Silver Line Gateway will provide a new route from Logan International Airport to Chelsea to service one of the greatest transit-dependent populations in Greater Boston. Secretary Davey called it a “game changer.” As panelist Michael Cantalupa further noted, transportation plays a vital role in any city’s development. As Boston continues to boom with new office buildings and other high-rise projects, it’s critical these new developments remain accessible through increased transportation options.

Secretary Davey assured the audience that money is being invested in the system’s aging infrastructure, which means the need for new transit cars will finally be addressed. In fact, the state will purchase new Red/Orange Line cars and make upgrades to signal systems in an effort to eliminate the on-going problem of constant breakdowns. Millions will also be poured into the state’s highway system. For example, the alignment of the I-90 Turnpike Allston Interchange will reconfigure ramps and straighten the highway to simplify the roadway, as well as allow more room for development.

Diesel Multiple Unit (DMU) Service is another initiative MassDOT will be implementing. The service will allow more affordable cars to utilize our existing commuter rail line that runs from the South Bay Rail Yard to the South Boston Waterfront. This will open up whole new possibilities for those looking to travel from the Seaport District to Back Bay, a route for which there is currently no efficient method of transportation.

It’s no secret here in Eastern Massachusetts that traffic has a paralyzing effect on local transportation on a daily basis. So it was welcome news to hear that MassDOT is collecting and analyzing years of data to deliver real-time traffic technology. This will not only inform commuters where traffic is, but how bad it will be at what time and why. Secretary Davey announced that by the end of 2014, the real-time traffic message signs that have appeared on major highways will be instituted across the Commonwealth; making Massachusetts the first state in the country to do so.

While the planned investments are exciting, a proposed ballot question could prevent many of these important projects from moving forward. Under the landmark transportation legislation passed last year, the gas tax will be indexed to inflation in the coming years. This will be only a penny or two per gallon at most, but will provide the funding needed to ensure these projects are a reality. The proposed ballot question would repeal the gas tax indexing and would eliminate this crucial source of funding. NAIOP and other business groups are strongly opposed to the ballot question and will be working to fight this initiative in the coming months.

Transportation impacts all of us, and it was fascinating to hear Secretary Davey and the featured panelists give us a sneak peak of what’s in store for the city of Boston and throughout Massachusetts.

The following blog post was submitted by Ally Quinby, Account Executive at Solomon McCown.

Real estate professionals gathered last week to discuss the significant transformation happening in our city’s core. The office, retail and residential sectors are all growing and working together to create a true 24/7, live, work, play environment in downtown Boston.

Even with the boom in the Seaport, Downtown is seeing an influx of new office tenants who want to be in the heart of the city. David Greaney of Synergy Investments told us that of the 70 leases his firm has completed this year, 59 of them were located downtown. And these tenants are looking at more than just the office space. Mark Smith said that Equity includes the amenities of the surrounding area on tours with potential tenants. He also told the room that tenants want comfortable, communicative environments.

All these companies have employees who want to be within walking distance of work. Despite the thousands of apartment units that are planned and currently being constructed, Bill McLaughlin of AvalonBay Communities said that the demand is there because young people aspire to live in the city; we are well-positioned to absorb the deliveries we will see in the next five to six years.

Retail is growing too. Andrea Matteson of CBRE/Grossman Retail Advisors highlighted Walgreens, Equinox, Scholars and the coming Legal Seafoods as game changers who have helped Downtown Crossing look better than ever. She said that first floor tenants are key in providing character for downtown buildings.

Foreign investment and continued development make Boston one of the U.S.’s most dynamic cities, and our panelists agreed that downtown is going to be an integral part of Boston’s growth in the coming years.

More than 100 people gathered on May 14th in Boston at Synergy Investments for NAIOP’s Coffee with Colleagues, a networking breakfast event. The sold out gathering was held at Synergy’s new corporate headquarters inside the 100 Franklin Street building, which Synergy owns. In addition to 100 Franklin, Synergy’s commercial real estate portfolio contains some of downtown Boston’s landmark buildings including 250 and 253 Summer Street, 211 Congress Street, and 185 Dartmouth Street, among others.

Steve Brodsky, Synergy’s Chief Operating Officer, stated that the event went well. “We were pleased to see the strong turnout, and it was a great networking event,” said Brodsky. “It was a terrific way to celebrate our one-year anniversary in our new space here at 100 Franklin Street, while working with NAIOP in support of the industry.”

Others commented positively about Coffee with Colleagues:

Dorrian Cohen Fragola, VP Marketing and Business Development, Janitronics: “This morning’s event was a wonderful opportunity to network, reconnect, and meet new people. Synergy has been so active in Boston recently. It was good to hear more about its plans and meet some of its people,” said Cohen Fragola. “Thanks to Synergy for hosting and to NAIOP for another successful event.”

Joel Loitherstein, P.E; Associate, Tata & Howard: “Coffee with Colleagues was well worth the trip into Boston. These events are a great way to meet new people and reestablish connections with past clients and colleagues. The atmosphere is very comfortable and you get a chance to meet senior level people at major development, legal, and consulting firms in the Boston area.”

Coming Up: Boston’s Other Waterfront

On May 22, don’t miss another exciting NAIOP event: Boston’s Other Waterfront featuring Joseph Shea, Kairos Shen, and Peter Spellios. Beyond the Seaport District, the panel will discuss the future of Boston’s waterfront from Lovejoy Wharf to East Boston, and beyond. It’s sure to be a good one!

To see other events NAIOP has in store, visit the Upcoming Events page. See you at the next great NAIOP event!